TV networkshttp://www.adweek.com/taxonomy/term/13810/all
enWhy Big Digital Video and TV Networks Are Increasingly Becoming Production Partnershttp://www.adweek.com/news/television/why-big-digital-video-and-tv-networks-are-increasingly-becoming-production-partners-171440
T.L. Stanley<img src="http://www.adweek.com/files/imagecache/node-detail/news_article/fea-tv-01-2016.png"> <p>
Television its dead&mdash;long live television. That could become the unofficial motto, or at least the crawl at the bottom of the screen, to explain the recent flurry of hookups between digital players like BuzzFeed, Vice and Mashable with old-guard media companies such as NBCUniversal, Disney and Turner Broadcasting.</p>
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While BuzzFeed can get 800,000 people to watch a <a href="https://www.buzzfeed.com/tasneemnashrulla/we-blew-up-a-watermelon-and-everyone-lost-their-freaking-min?utm_term=.vmKvxdjr5#.np0zWwxmj" target="_blank">watermelon explode</a>&mdash;live on Facebook&mdash;and <a href="http://www.adweek.com/news/technology/after-11-years-digital-video-youtube-wants-take-tv-sized-budgets-171156" target="_blank">YouTube claims to reach</a> more consumers 18-49 than any TV network, the digital world obviously thinks TV still has its charms. Hint: massive reach and enviable ad dollars from blue-chip brands.</p>
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Though it&#39;s not the only reason for the current wave of mergers, acquisitions and investment, TV is a driving force for the nascent relationships blurring the line between linear and digital and introducing sexy young things to a platform that is the very definition of old media. &quot;Linear TV is vulnerable, yes, but it&#39;s <a href="http://www.hollywoodreporter.com/news/michael-wolff-wholl-win-lose-892220" target="_blank">still a monster</a>,&quot; notes media analyst David Deal of David J. Deal Consulting. &quot;And it&#39;s not going away.&quot;</p>
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At least one much-sought-after digital darling not only believes this is the case but is making TV a top priority. Vice Media CEO Shane Smith announced the same week as its Digital NewFronts presentation this month that the fast-growing media company known for its grit and swagger is <a href="http://www.adweek.com/news/television/vice-will-produce-original-series-espn-171201" target="_blank">joining forces with ESPN</a> to share, co-create and co-promote sports programming across multiple venues, as part of an overall relationship with Disney. Pillars of the alliance include the award-winning <a href="http://www.imdb.com/title/tt1408430/" target="_blank">30 for 30</a> documentaries from the sports powerhouse telecast on <a href="http://www.adweek.com/news/television/vice-will-take-over-ae-networks-h2-next-year-rebranding-it-viceland-167912" target="_blank">Viceland</a>, Vice&#39;s new 24-hour cable network, and Vice&#39;s in-your-face-style series on ESPN.</p>
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&quot;I applaud Shane for understanding that television is the smartest path to worldwide leadership,&quot; ESPN president John Skipper was quoted as saying, with just the slightest wink, in <a href="http://www.adweek.com/newfronts" target="_blank">Adweek&#39;s coverage of the recent NewFronts</a>. It follows Smith&#39;s outsized boast to The Hollywood Reporter (Adweek&#39;s corporate sibling) earlier this spring: &quot;Twelve months from now, we&#39;ll be on the cover of Time magazine as the guys who brought millennials back to TV.&quot;</p>
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Smith&#39;s extreme confidence aside, Viceland has had an <a href="http://www.adweek.com/news/television/viceland-launches-vr-partnership-samsung-and-downplays-weak-early-tv-ratings-data-170452" target="_blank">inauspicious start ratings-wise</a>, though its partnership with Time Warner&#39;s HBO seems to be flourishing. But despite the uneven results thus far, digital bigwigs like Smith remain mighty bullish on the tube.</p>
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<strong>Where&#39;s the fire?</strong></p>
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The list of legacy media players making alliances with digital companies continues to grow. Disney put $400 million into Vice, NBCU invested $200 million into BuzzFeed and another <a href="http://www.nytimes.com/2015/08/13/business/media/nbcuniversal-invests-200-million-in-vox-media.html?_r=0" target="_blank">$200 million into Vox Media</a>, and Turner put $15 million in the tech site Mashable. In fact, hardly a week goes by without another deal unfolding&mdash;E.W. Scripps buying the comedy site Cracked, <a href="http://fortune.com/2016/01/19/onion-univision/" target="_blank">Univision taking over The Onion</a>, Verizon and Hearst acquiring Complex Media.</p>
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What&#39;s the motivation? The bottom line, naturally. Pressure has built to the boiling point on old-school, publicly held media companies in the face of aging and fragmenting audiences and competition from over-the-top streaming services, viral videos and other entertainment options, analysts concur.</p>
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&quot;No one can get in front of their board of directors and say, &#39;Here&#39;s what we&#39;re doing: nothing,&#39;&quot; says Tim Flattery, senior practice lead, content marketing at MEC Wavemaker. &quot;You have to be moving forward. Standing still is not an option&quot;</p>
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There are parallels to be drawn between this moment and the music industry in the &#39;90s, when record executives presumed that digital downloads and the threat of emerging players wouldn&#39;t unseat their reign. It seems unthinkable today, doesn&#39;t it?</p>
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Broadcasters don&#39;t want to repeat that mistake, which is why they&#39;re chasing the likes of BuzzFeed, whose content racks up 7 billion monthly views and which has sophisticated analytics to track how content spreads online. Legacy media wants entree to that <a href="http://www.adweek.com/news/television/how-millennials-consume-tv-depends-which-stage-life-theyre-170393" target="_blank">elusive millennial</a> who flocks to listicles, quizzes, animated gifs and other snackable digital fare.</p>
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&quot;They can access innovation this way, by investing in emerging companies that move quickly and have leadership that&#39;s looking at the world differently,&quot; says <a href="https://www.linkedin.com/in/anandsanwal" target="_blank">Anand Sanwal</a>, co-founder and CEO of data analytics company CB Insights. &quot;It makes more sense than trying to build it themselves. The big companies just can&#39;t move as fast.&quot;</p>
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These arrangements are &quot;marriages of necessity,&quot; notes Deal, adding that the quest for millennials has created &quot;some pretty interesting bedfellows.&quot;</p>
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The attraction is mutual. Digital startups that might&#39;ve seemed too hip for salesmanship before have had an attitude adjustment, parading their assets at the just-concluded NewFronts in lavish, star-studded events and trying to tap into TV-size ad budgets.</p>
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BuzzFeed CEO Jonah Peretti <a href="http://www.adweek.com/news/technology/buzzfeed-now-getting-7-billion-content-views-month-171182" target="_blank">told the NewFronts crowd</a> he was especially excited about live video and the results of the watermelon stunt, a 50-minute livestream that, for the first time, gave the site an audience comparable to television. (The company&#39;s follow-up stunt was a livestream of a giant balloon being blown up for 90 minutes. Peretti proudly noted that nearly 1 million people watched.)</p>
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During YouTube&#39;s NewFronts presentation (which the company dubs Brand Cast), CEO Susan Wojcicki boasted that on mobile devices alone, the site reaches more adults 18-49 than any TV network. And though <a href="http://www.adweek.com/news/technology/heres-what-youtube-promised-advertisers-its-star-studded-brandcast-2016-171316" target="_blank">Big Bird did the Nae Nae</a> as part of the YouTube pitch, it wasn&#39;t distracting enough to stop Wojcicki&#39;s claim from being scrutinized after the fact. The very next day, Time Warner Cable Media executives fired back. Stopping short of outright calling the numbers dubious, they argued that television is still the best way to reach the broadest audience possible, including millennials.</p>
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For all their success, the digital companies know they need more scale, more resources, promotional and ad sales opportunities, and some of that old-media credibility, industry watchers agree.</p>
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The current M&amp;A trend can trace its roots back several years to notable, early deals like DreamWorks Animation&#39;s <a href="http://thenextweb.com/media/2013/05/01/dreamworks-animation-acquires-teen-targeted-youtube-network-awesomenesstv-for-33m/#gref" target="_blank">$33 million acquisition</a> of the teen-targeted, multichannel network (MCN) AwesomenessTV and Disney&#39;s $500 million purchase of MCN Maker Studios. Soon, A+E Networks would get in the game, acquiring a 10 percent stake in Vice Media, which already has a weekly news series on HBO and is working on a nightly news show for the pay cable net expected to launch this fall.</p>
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<strong>Upside for both sides</strong></p>
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It no doubt led to an epidemic of insomnia among executives at traditional media companies several weeks ago when Interpublic Group announced it will <a href="http://www.adweek.com/news/technology/magna-global-pours-250-million-youtube-ads-tv-audiences-drop-171242" target="_blank">take $250 million from linear TV</a> networks and spend it on YouTube between October 2016 and October 2017.</p>
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Then, there was the <a href="http://www.adweek.com/news/television/heres-how-much-advertisers-have-increased-their-digital-video-ad-spending-171158" target="_blank">Interactive Advertising Bureau study</a> in which 72 percent of marketing and advertising execs surveyed said they would move funds out of TV budgets in order to boost their spending on digital video. In the survey, 41 percent said they intended to pull from cable while 47 percent said broadcast would get cut. More than two-thirds thought original digital video would become as important as TV programming over the next three to five years. The IAB also reported that advertisers on average are spending more than $10 million annually on digital video, up 85 percent versus two years ago.</p>
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Sobering numbers that many believe get at the heart of the networks&#39; alliances with digital content purveyors.</p>
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While the digital publishers are young, they are also mature in an important way, as Deal puts it. &quot;They&#39;re content-creation machines and they can compete just as well with traditional media,&quot; he says. &quot;Their ability to create not just compelling but shareable content is what makes them especially attractive to the old-line media.&quot;</p>
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Digital companies also have a wealth of in-house, brand-friendly talent&mdash;take YouTube&#39;s PewDiePie and <a href="http://www.adweek.com/news/technology/how-youtube-beauty-star-rachel-levin-keeps-7-million-subscribers-tuned-171152" target="_blank">Rachel Levin</a> (who was featured on the cover of Adweek&#39;s NewFronts issue) or BuzzFeed&#39;s The Try Guys&mdash;enabling them to quickly build brands with balls, so to speak. (ESPN&#39;s Skipper said during the NewFronts that Vice does &quot;an extraordinary job presenting stories through their own, very unique lens, and working with them will help to bring a new perspective to our storytelling.&quot;)</p>
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Though some analysts predict more partnerships are on the way, others believe the frenzy of deals is fueling itself and that traditional companies should be cautious about jumping in for fear of missing out. &quot;The narrative of these digital companies has been unquestioned, and they&#39;ve been able to manage their mystique,&quot; says Brian Wieser, senior analyst, advertising at Pivotal Research Group. &quot;I think our perception vastly outweighs their relative scale.&quot;</p>
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As reported this spring, BuzzFeed <a href="http://www.cnbc.com/2016/04/12/buzzfeed-missed-2015-revenue-targets-and-slashes-2016-projections.html" target="_blank">fell far short</a> of its $250 million in projected revenue last year, coming in closer to $170 million and slashing its 2016 projections in half as a result. Around the same time, analysts and journalists started to pick apart Vice&#39;s audience data, saying it rolls in traffic numbers from its partner sites to sweeten its data. (Vice told Adweek its traffic is holding steady and that there are actually months in which its partner sites drag down its traffic numbers.)</p>
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And while budgets are being shifted in some cases, the fact remains that advertisers continue to spend more on TV than any other medium. Even despite ratings declines, TV ad spending is projected by eMarketer to grow 2.5 percent this year, making up about 37 percent of total ad expenditures in the U.S.</p>
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TV is &quot;the media channel with the highest ROI,&quot; notes Ian Whittaker of media research firm Liberum Capital, pointing out that a hit show can mean hundreds of millions of dollars to networks and producers.</p>
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Digital video companies share a common goal with their more mature partners. &quot;They need growth&mdash;of users, share price, revenue, profit,&quot; says Flattery. &quot;You can only run on rounds of venture capital for so long.&quot;</p>
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And of course, investors want a return, which is more likely to happen when smaller companies get infusions of cash from big media and access to their marquee television and film properties, Wieser explains. NBCU&#39;s portfolio alone, for example, includes two nights of NFL football (Sunday and Thursday); late-night ratings leader The Tonight Show Starring Jimmy Fallon; the Today show, the dominant morning TV program in the demo; and more than a half-dozen cable networks covering news, sports and entertainment.</p>
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In August, <a href="http://money.cnn.com/2016/05/09/media/olympics-buzzfeed-nbc-social-media/" target="_blank">BuzzFeed will act as NBC&#39;s social media team</a> on the ground at the Summer Olympics in Rio de Janiero, producing content from the games for NBC&#39;s various platforms and for social media partner Snapchat. The content will likely end up on Facebook and Twitter, too. Meanwhile, Mashable&#39;s deal with Turner will provide for cross-pollination in numerous ways, including TBS and TNT working with Mashable to co-develop and distribute content and partner on cross-platform ad sales packages.</p>
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<strong>Brands want in</strong></p>
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Aside from the media players, there is plenty of pressure on advertisers that want to be in the content business but have flat or declining budgets, reports Rich Guest, president, North America at Tribal Worldwide. &quot;Brands are asking, &#39;How can I produce more content with the same or less money?&#39;&quot; he says. &quot;I need great platform partners who are also great content creators.&quot;</p>
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And like the TV networks and MCNs, those relationships are also taking shape.</p>
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Last winter, shortly after BuzzFeed hired its first executive creative producer to cook up content tailored to brands, the site linked up with <a href="http://www.nbcuniversal.com/article/nbcuniversal-and-amex-celebrate-leap-day-giving-viewers-more-content" target="_blank">NBC and American Express on a Leap Day stunt</a>. The event replaced about 30 minutes of national ad spots with custom content during the network&#39;s prime-time schedule, including the hit series Blindspot and The Voice. Some of that content included a mini-documentary about The Voice&#39;s Season 9 winner and a visit with the cast and creator of The Blindspot during which they chatted about fan theories.</p>
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Brands want to be &quot;co-financiers of ideas,&quot; as Flattery puts it, which helps to take a media investment and turn it into a brand builder.</p>
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Guest notes that industry executives are looking more at a Red Bull model than a traditional commercial one. &quot;We have to make things people want to see,&quot; he says. &quot;The content has to be good enough that they seek it out.&quot;</p>
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Rebecca Lieb, a digital marketing and media analyst, is interested to see how the old and new media titans will ultimately mesh.</p>
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&quot;When tech and data can be combined with marketing initiatives, publishing and production, you can create real juggernauts,&quot; she says. &quot;But that&#39;s a lot of stakeholders to bring around a table and play nice together.&quot;</p>
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<em>This story first appeared in the May 16, 2016 issue of Adweek magazine.<br />
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TelevisionAd SupportedAdvertisingaudienceBrandsBuzzfeedContentDigitaldigital videoDisneyFeatureHboMagazine ContentNBCUniversalNewFrontsOTTRed BullStreamingTelevisionThe Upfront IssueTime ShiftingTurnerTV networksVice MediavideoViewersviewsYoutubeMon, 16 May 2016 00:00:04 +0000171440 at http://www.adweek.comSupreme Court Refuses to Hear Ivi's Casehttp://www.adweek.com/news/technology/supreme-court-refuses-hear-ivis-case-148016
Katy Bachman <p>
Ivi, a pay TV service that was streaming over-the-air TV signals on the Internet without permission, has finally reached the end of the road in court.</p>
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The Supreme Court on Monday denied the company&#39;s petition for certiorari and refused to hear the case, letting stand the Second Circuit decision upholding an <a href="http://www.adweek.com/news/technology/appeals-court-upholds-injunction-against-ivi-143147" target="_blank">injunction</a> against the service.&nbsp;</p>
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The decision hands a satisfying victory and perhaps hopeful one to broadcast networks ABC, CBS, NBC, Fox and other station owners that sued ivi in 2010 for copyright infringement and are faced with a similar legal challenge to Aereo, another streaming service in New York <a href="http://www.nytimes.com/2013/03/18/business/media/barry-dillers-aereo-service-challenges-cable-television.html?_r=0" target="_blank">backed by Barry Diller</a>.</p>
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Launched three years ago, ivi retransmitted TV signals and streamed them to subscribers who paid a monthly fee to downloaded ivi&#39;s TV player. Broadcasters immediately launched lawsuits against the service, claiming ivi was retransmitting signals without copyright permission. Ivi asserted that it should be defined like a cable system and pay only a compulsory copyright license, but the Federal Communications Commission refused that definition.</p>
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Broadcasters are having a tougher time shutting down Aereo because it claims to provide a personal use by renting subscribers an antenna to pick up the signals to be streamed via the Internet.</p>
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So far, Aereo has managed to ward off any court injunctions and plans to <a href="http://www.adweek.com/news/technology/aereo-expands-its-market-lineup-146384 " target="_blank">expand</a> to 22 cities this year. From a business standpoint, that&#39;s good news for Aereo. But legally, it gives broadcasters more cities in which to sue.</p>
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TechnologyAereoBarry DillerCopyrightInternet streamingiviSupreme CourtTvTV networksMon, 18 Mar 2013 15:49:30 +0000148016 at http://www.adweek.com